Establishing and Managing a Financial Service; SBA Loans, and How They are Marketed
...ed. Competitors may be entering or leaving the market, for example. It is also very useful to know what your competitors' strategies are (i.e., how they compete). Marketing Strategy Marketing strategy encompasses identifying customer groups (Target Markets), which a small business can serve better than its target competitors, and tailoring its product offerings, prices, distribution, promotional efforts and services towards that particular market segment (Managing the Market Mix). Ideally, the strategy should try to address customer needs which currently are not being met in the market place and which represent adequate potential size and profitability. A good strategy implies that a small business cannot be all things to all people and must analyze its market and its own capabilities so as to focus on a target market it can serve best. Advertising Advertising is an investment in your business' future. And, like any investment, it's important to find out as much as you can before you make a decision. There are many different way in which to advertise. Some examples of advertising are: Newspapers Advertising There are many advantages to advertising in the newspaper. From the advertiser's point-of-view, newspaper advertising can be convenient because production changes can be made quickly, if necessary, and you can often insert a new advertisement on short notice. Another advantage is the large variety of ad sizes newspaper advertising offers. Even though you may not have a lot of money in your budget, you can still place a series of small ads, without making a sacrifice. However, advertising with the newspaper does not come without some disadvantages. Newspapers usually are read once and stay in the house for just a day. The print quality of newspapers is not always the best, especially for photographs. So use simple artwork and line drawings for best results. The page size of a newspaper is fairly large and small ads can look minuscule. Your ad must compete with other ads for the reader's attention. You're not assured that every person who gets the newspaper will read your ad. They may not read the section you advertised in, or they may simply have skipped the page because they were not interested in news on it. Radio Advertising Radio is a relatively inexpensive way of reaching people. It has often been called the "theater of the minx' because voices or sounds can be used to create moods or images that, if crested by visual effects, would be impossible to afford. You can also negotiate rates for your commercials, or even barter. Stations are often looking for prizes they can give away to listeners, so it's possible to get full commercial credit for the product or service you offer. Advantages to radio advertising include the ability to easily change and update scripts are paramount to radio broadcasting, since news stories can and often do happen live. Radio is a personal advertising medium. Station personalities have a good rapport with their listeners. If a radio personality announces your commercial, it's almost an implied endorsement. Radio is also a way to support your printed advertising. You can say in your commercial, "See our ad in the Sunday Times," which makes your message twice as effective. Again, there are some disadvantages to radio advertising; You can not review a radio commercial. Once it plays, it's gone. If you did not catch the entire message, you can't go back and hear it again. Since there are a lot of radio stations, the total listening audience for any one station is just one piece of a much larger whole. That's why it's important to know what stations your customers and prospects probably listen to. Moreover, most of the time, you'll need to buy time on several radio stations to reach the market you seeking. People don't listen to the radio all the time, only during certain times of day. So, it's important to know when your customers or prospects are listening. For example, if you want to reach a large portion of your audience by advertising during the morning farm report, you must specify that time period to the radio station when you buy the time. One of the most popular times to reach people is during "drive time" (from 6 a.m. to 10 a.m. and 3 p.m. to 7 p.m.). It's called that because most people are going to or from work during this period, and because most people listen to their radio when they drive. Unfortunately, radio stations know that this is a favorite time to advertise, so commercial costs are much higher during this time. Radio as a broadcasting medium, can effectively sell an image, or one or two ideas at the most. It is not, however, a detailed medium, and is a poor place for prices and telephone numbers. Radio listeners increase in the spring and summer, contrary to television audiences which increase in the fall and winter and decrease in the summer. This is an important aspect to consider when choosing an advertising media. Target Marketing Owners of small businesses have limited resources to spend on marketing activities. Concentrating their marketing efforts on one or a few key market segments is the basis of target marketing. The major ways to segment a market are: 1. Geographical segmentation - specializing in serving the needs of customers in a particular geographical area (for example, a neighborhood convenience store may send advertisements only to people living within one-half mile of the store). 2. Customer segmentation - identifying and promoting to those groups of people most likely to buy the product. In other words, selling to the heavy users before trying to develop new users. Managing the Market Mix There are four key marketing decision areas is a marketing program. They are • Products and Services, • Promotion • Distribution • Pricing. The marketing mix is used to describe how owner-managers combine these four areas into an overall marketing program. Products and Services - Effective product strategies for a small business may include concentrating on a narrow product line, developing a highly specialized product or service or providing a product-service package containing an unusual amount of service. Promotion - This marketing decision area includes advertising, salesmanship and other promotional activities. In general, high quality salesmanship is a must for small businesses because of their limited ability to advertise heavily. Good Yellow Page advertising is a must for small retailers. Direct mail is an effective, low-cost medium of advertising available to small business. Price - Determining price levels and/or pricing policies (including credit policy) is the major factor affecting total revenue. Generally, higher prices mean lower volume and vice-versa; however, small businesses can often command higher prices because of the personalized service they can offer. Distribution - The manufacturer and wholesaler must decide how to distribute their products. Working through established distributors or manufacturers' agents generally is most feasible for small manufacturers. Small retailers should consider cost and traffic flow as two major factors...